Starting a gym is a significant investment that requires careful planning and consideration. In this article, we will go through the basic costs, financing options, and how you can estimate the number of customers needed to reach the break-even point.
Cost Structure
The startup costs for a 500 square meter gym can range between 250,000 and 350,000 euros if the equipment is new. The biggest expenses are equipment, flooring materials, lighting, sound systems, shower and changing facilities, and access control systems.
- Equipment: Gym equipment is always the largest expense. Purchasing new equipment can cost around 200,000 euros. These equipment costs need to be paid back over five years, which means monthly repayments of approximately 3,300 euros including interest.
- Rent: Rent is another significant expense. For example, at a monthly rent of 10 euros per square meter, the rent for a 500 square meter space is 5,000 euros per month.
- Other expenses: These include electricity, system costs, etc., which are about 2,000 euros per month.
Based on these costs, the total monthly expenses are approximately 10,000 euros.
Financing Options
Many gym entrepreneurs use leasing financing for equipment purchases, which helps to spread the costs over a longer period. Additionally, in some cases, renovation, lighting, and ventilation costs can be allocated to the rent, reducing the required capital.
Calculating the Break-Even Point
To assess the profitability of the gym's operations, it is important to calculate how many customers are needed to cover the monthly expenses. If the monthly expenses are 10,000 euros and the gym membership fee is, for example, 50 euros per month, at least 200 customers are needed to cover the costs (10,000 € / 50 € = 200 customers).
It is also important to note that this calculation does not include potential salary costs. If you need paid staff, it will significantly impact the break-even point.
In Conclusion
If you are planning to start your own gym, consider the above-mentioned costs and financing options, and create a comprehensive business plan to achieve your goal.
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Founded in 2020, Loaded has quickly expanded to four gyms in Tampere and Vantaa, Finland.
Sales Manager / WiseGym
VILLE AHVENAINEN
I have been a gym entrepreneur for 10 years and own 3 fitness centers. I want to help gyms find more efficient operating models.
I am really pleased that the gym industry has finally found a system that adapts to our operations rather than forcing gyms to modify their operations to fit the system.
Expert / WiseGym
TERO KOTILAINEN
I have nearly 10 years of experience in building a CrossFit gym and brand from scratch. I also know that customer experience is very important in this industry. A gym entrepreneur's time is often very tight and daily life is busy. I want to help entrepreneurs with these problems through system solutions.